Speech
of
His Excellency Fidel V. Ramos
President of the Philippines
At the Asian Management Awards

[Delivered at the Westin Philippine Plaza Hotel, February 17, 1994]

Excellence: the in-thing

TONIGHT’S OCCASION reminds me of the classic story of the rivalry between an old-name company that made very fine, exquisitely crafted timepieces and a company that made state-of-the-art, technology-efficient watches.

The traditional manufacturer of timepieces had grown—over several generations—very comfortable with his success. He became so comfortable that he began to view success as a naturally occurring quality that was his inherent right. He came to see himself as a mighty, unshakable tower of corporate success that would last forever.

The march of time

In the meantime, the new watchmaker, whose name was not very well known, realized he could never convince the market that his products were better than those of his older competitor. And although he could make very accurate watches, his company knew no one would buy them unless the watches were different from—or better than—his competitor’s fine timepieces.

So the younger watchmaker changed—literally—the face of watchmaking. Instead of rotating hands pointing at numbers, he perfected a new liquid crystal technology that displayed the time in a small window. This window also showed the date, the day and what year it was. Soon he added an alarm clock that emitted a musical tone. A stopwatch function soon followed.

One would think such an advanced product of precision engineering would be incredibly expensive. But it was not. In fact it was relatively inexpensive.

When he saw these developments, the traditional watch manufacturer chuckled and merrily continued on his way, wondering how long “digital” watches would last. Thus he was startled when he felt the first vibrations as his tower began to shake in the market’s breeze.

Then the breeze soon turned cold and became a brutal wind that threatened his classic company’s very existence.

Credibility

Like that older timepiece manufacturer, the capacity of the Philippines to match the progress of other Asian nations deteriorated so greatly since the mid-sixties that we ceased to be competitive in terms of jobs, investments and export earnings. We were not just poor players, we were no longer players.

The analogy seems to fit. It is often repeated, with heavy lament, how in the fifties we were second only to Japan in the region, and how we slipped down the ladder afterward.

But the story of the watchmakers does not end there. As indeed the story of our people goes on as we now move on more resolutely along the path of growth.

Acknowledging his mistakes was hard for the traditional timepiece manufacturer. It has been hard for us Filipinos as well.

To make his comeback, the traditional timepiece manufacturer looked at the competition. He realized he could never establish a name for high-tech products and that the chances of making a better digital watch were very slim.

But he knew that he could make a more beautiful, more fashionable watch. And so he did. And because he used relatively simple technology to do this, he found that he could change the look—the elegance—of his fine timepieces very rapidly, by always giving his customers something new.

By recognizing the need to establish his own competitive advantage, the old timepiece maker fought his way back. He adopted a credible strategy that exploited a distinct competitive advantage: fashion sense.

The road back

The Philippines also is on the road back. We recently cited the indicators that tell us this is so. Of these indicators, there is one I am particularly proud of. And that is the confidence our Asia-Pacific neighbors are showing in the Philippines.

Before the historic visit of Prime Minister Mahathir bin Mohamad early this month, the Malaysian business community was already among the biggest investors in Subic Bay. And with their Filipino partners, Malaysian corporations are elsewhere taking part in the construction of power plants and irrigation systems, manufacture of computer software, preffabrication of concrete products, and making of aluminum rods.

Japan remains our largest investor, but China, the United States, South Korea, Indonesia, Taiwan, Thailand and Singapore also have made new commitments to expand, invest and conduct a greater volume of business in our communities. Foreign investment and other cooperative arrangements encompassing Mindanao, East Malaysia, Eastern Indonesia and Brunei Darussalam are becoming a reality. All these are critical components of our capacity to reclaim our previous role of 25 years ago.

This is not a role to which we have a natural right: it is a role that we must earn—as a player in Asia’s development miracle.

To achieve this objective, there is one key element that must be present among us. That component—as I have said—is you of the private sector who represent the best in Philippine business. We in Government are responsible for ensuring that the Philippine arena is attractive and equitable. It is you who must field the players and teams, score the points and win our games.

The playing field

In his book, The Decision Makers, the British management expert Robert Heller describes the seven “ins” to successful strategy development and execution. I would like to borrow them this evening to help me describe the kind of playing field we are putting in place for Philippine business and foreign investors.

“Investment.” The first “in” is investment. We had been uncompetitive in attracting foreign investment over the past three decades. Yet without a substantial level of foreign investment, we cannot develop the infrastructure, the jobs, or the world-class export products we need to happen rapidly.

But we are now beginning to see the first indications that we are becoming competitive. With great optimism, I say to our local investors—go for it!

Last year our Board of Investments reported foreign investment inflows of $522 million, about double the inflows in 1992. And almost half of last year’s investments came from Asia. This year we hope to double that volume.

“Information.” The second “in” is information. Like those in business, we in Government intend to stay close to our customers, and to give them what they need to achieve our development objectives.

Government will be more responsive at every level of interaction, from the private citizen lining up to obtain tax information to the multinational executive who needs to get his shipments out of customs faster.

To do this, our departments and bureaus are developing regular programs to capture feedback from their principal constituents. And because information should flow both ways, we will also tell our constituents how we are addressing their concerns.

“Introductions.” Another “in” is introductions.

We realize that the playing field will never be in perfect condition, but it could be in good condition and it might eventually be in near perfect condition. But it will only stay so if we constantly work to keep it that way.

Regular and frequent fine-tuning and development of Government programs intended to enhance our support of private-sector initiatives are being introduced. Continually enhancing Government programs and incentives, we believe, will provide regular opportunities to sharpen our competitive advantage as a nation.

“Intensity.” The fourth “in” is intensity. The Philippines offers unique advantages.

First is our people. Our people are a critical advantage because of their energy, talent, creativity and adaptability arising out of a democratic culture.

Second, we have a superb tradition of producing competent and dedicated young professionals.

I am told that Japanese companies operating in other Asian nations seek out engineers from the Philippines because they are absorptive and generalist in their perspective. This means they are not only responsive to new ideas and new technologies but also skillful enough in adapting them to emerging needs.

Third, there are certain things in which we are simply good, such as in managing others. Throughout Asia, competent Filipino managers will remain an important strategic resource.

We also are very good at publishing and entertaining.

Another thing we do well is create sophisticated software for advanced systems, including software for multinationals.

So we intend to capitalize on these strengths, rather than try to be everything to everyone. By concentrating on these advantages, we can pursue development with greater intensity.

“Internationalism.” We now come to internationalism.

I feel that we must learn to compete on a global scale.

Our   internalization and internationalization of business standards and practices will lead to the development of new manufacturing technologies, world-class infrastructure and information systems.

Some of you tonight have begun to demonstrate the capacity to compete effectively in global markets. We will look to you to provide models of excellence, and to share your expertise and technology with other Philippine companies that seek to emulate your accomplishments.

For our part, we continue to push for the enhancement of infrastructure, services and relationships needed to capture markets within and outside the Philippines.

“In-depth.” We aim to do all these things in depth—with extreme thoroughness and determination.

By so doing, we hope to make certain that never again shall we—as a nation, government or enterprise—take our successes and our blessings for granted. We will discard the notion that our institutions have an inherent right to success.

We will work to succeed, and work hard to sustain success.

Do things right

It seems that for years we floundered in looking for alternatives to development. We were frequently willing to take almost any alternative or model, except the one we knew, ultimately, was the only one that would work. And that is: to do things right.

This obvious alternative, Heller suggests, whether “in or out of adversity, is simply the will to find and to make that decision.”

We have the will, and we have taken the rational and reasonable alternative of pursuing excellence.

The examples of excellence we honor this evening will be the guideposts along our road to sustainable development.